Let us look into the Telecom Tower Requirement of Top 4 Operators – Airtel, Vodafone, Reliance Communications and Idea Cellular.
Bharti Airtel Airtel is already present on Bharti Infratel [BHIN] sites; will contribute to incremental tenancy of Indus Towers. Airtel is a tenant on almost all of Bharti Infratel’s towers. Airtel will contribute to Bharti Infratel’s incremental tower growth but not to its incremental tenancy. However, Airtel will be the key driver of 3G and 4G loading revenue, being the single-largest operator on Bharti Infratel’s towers. This benefit will be back-ended, as Bharti Infratel’s towers are in B and C circles, which shall see delayed 3G/4G investments, as they are predominantly rural
Vodafone India Vodafone is only on the 1,800MHz band, necessitating continued investments in these circles. Bharti Airtel has the highest market share in most of these circles, and BHIN is likely to have the deepest rural coverage in these circles. Operators generally cover the larger markets before moving on for deeper coverage, and being the most-well entrenched rural operator, BHIN is likely to be the key beneficiary when Vodafone invests in these circles.
Reliance Communications Most of Reliance Infratel’s tenancy comes from the CDMA/GSM business of RCOM (RCOM IN). Reliance Infratel’s potential to increase tenancy is limited as its main tenant, RCOM, is not currently investing in network sites and its growth has been below-industry levels. The company’s 3G/4G co-location prospects are also limited to circles in which RCOM has acquired 3G spectrum. Reliance Infratel’s anchor tenants’ revenue market share is below 10%.
Idea Cellular Idea Cellular has added close to 37,000 sites over the past three years (up 72%), which is likely to be the highest in the industry. This has enabled the company to improve its RMS and become a pan-India operator from a regional operator. Idea has added own sites and has entered into intra-circle roaming arrangements. Idea is a new entrant in most of Bharti Infratel only circles and this could help BHIN improve its tenancy as Idea continues to roll out sites.